Quicksilver Resources (KWK) Stock: Weak On High Volume Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Quicksilver Resources ( KWK) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Quicksilver Resources as such a stock due to the following factors:

KWK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.0 million.

KWK has traded 307,451 shares today.

KWK is trading at 2.60 times the normal volume for the stock at this time of day.

KWK is trading at a new low 3.01% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

Quicksilver Resources Inc., an independent oil and gas company, is engaged in the acquisition, exploration, development, production, and sale of natural gas, natural gas liquids, and oil in North America. Currently there is 1 analyst that rates Quicksilver Resources a buy, 3 analysts rate it a sell, and 5 rate it a hold.

The average volume for Quicksilver Resources has been 3.7 million shares per day over the past 30 days. Quicksilver has a market cap of $239.4 million and is part of the basic materials sector and energy industry. The stock has a beta of 1.53 and a short float of 56.5% with 7.96 days to cover. Shares are down 56.7% year-to-date as of the close of trading on Friday.

TheStreet Quant Ratings rates Quicksilver Resources as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 114.9% when compared to the same quarter one year ago, falling from $242.53 million to -$36.10 million.

The gross profit margin for QUICKSILVER RESOURCES INC is currently lower than what is desirable, coming in at 33.62%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -30.58% is significantly below that of the industry average.

The share price of QUICKSILVER RESOURCES INC has not done very well: it is down 22.90% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

QUICKSILVER RESOURCES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, QUICKSILVER RESOURCES INC turned its bottom line around by earning $0.90 versus -$13.83 in the prior year. For the next year, the market is expecting a contraction of 129.6% in earnings (-$0.27 versus $0.90).

KWK, with its decline in revenue, underperformed when compared the industry average of 3.5%. Since the same quarter one year prior, revenues fell by 32.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.